Does WWE's bid for state tax help contradict Senate candidate's platform?

Neil Vigdor

Published 9:03 pm, Saturday, October 20, 2012

Did Linda McMahon's family-run wrestling empire, which has brushed aside numerous complaints of a clandestine political alliance between the company and Senate candidate, contradict a key plank in her economic recovery plan that seeks to end corporate welfare?

Executives from the WWE, formerly World Wrestling Entertainment, revealed Thursday that the Stamford conglomerate is seeking to become part of a business retention and magnet program started by Gov. Dannel P. Malloy that provides state tax credits and other incentives to blue-chip companies.

Thus far, nine companies, headlined by ESPN, NBC Sports, Cigna and the world's largest hedge fund, Bridgewater Associates, have qualified for up to $155 million in tax credits through the First Five and Next Five programs, which have been widely criticized by McMahon's fellow Republicans.

McMahon, who has wedded her second bid for the Senate to a six-point plan for economic prosperity, wants to eliminate the vast majority of corporate tax credits and direct cash payments to businesses.

She left the WWE in August 2009, turning over the reins as the company's CEO to her husband, Vince McMahon.

"Linda's six-point jobs plan clearly calls for an end to federal subsidies and loopholes and, as a U.S. senator, she would have no input into how Connecticut chooses to distribute state tax credits," said Todd Abrajano, a campaign spokesman for McMahon.

WWE sought to distance itself from the matriarch of professional wrestling, saying that McMahon hasn't been involved in any decision-making since she left the company.

"WWE makes decisions that are best for its business as a publicly-traded global entertainment company and does not concern itself with politics," company spokesman Brian Flinn told Hearst Connecticut Newspapers by email Friday.

The rival campaign of McMahon's Democratic opponent, U.S. Rep. Chris Murphy, who is seeking a promotion to the Senate, accused the wrestling mogul of gaming the system.

"This news shines a spotlight on when McMahon was CEO of the WWE and took $10 million in state tax credits intended to create jobs, laid off 10 percent of her workers, and took home $46 million for herself," said Eli Zupnick, a spokesman for Murphy.

According to the WWE, its workforce has grown from 585 to 700 jobs over the past 18 months. The company, eyeing the launch of its own television network for a number of years, has set a benchmark of adding an additional 200 jobs if accepted to the Next Five program.

"WWE is upholding its responsibility to shareholders by applying for all available economic assistance provided by the state of Connecticut, and any other state or country where we do business," Flinn said.

The state Department of Economic and Community Development is projecting that up to 4,748 jobs will be created and 11,087 jobs will be retained under the program, which offered $185 million in taxpayer subsidies as a sweetener to the participants. Once the Next Five is rounded out, five more companies will be added to the program for a total of 15, as authorized by the General Assembly.

Top Republicans wonder if taxpayers are getting enough bang for the buck, however.

"I'm emphatically opposed to the First and Next Five program as a colossal waste of taxpayer money," said Jerry Labriola Jr., chairman of the state GOP. "Gov. Malloy's orgy of spending, taxing and borrowing has left Connecticut's economy stuck in reverse. The government shouldn't be picking winners and losers in the private economy. Soviet-style central planning has been an abject failure, as has been shown on the national level with Solyndra," he said.

"These taxpayer dollars would be much better allocated to across-the-board tax relief for Connecticut's small businesses."

"The closer he gets to Election Day, the more overheated Jerry's becoming," Occhiogrosso said in a statement. "By this time next week I expect he'll be in total free-fall. He should take a deep breath, exhale, and begin devising his `here's why we had another Bad Election Day' memo. What's next, a request from him for Gov. Malloy's birth certificate?"

DECD spokesman James Watson said that the agency has a longstanding policy not to discuss pending applications like the one made by WWE earlier this year.

"It is administered here so we do the intake and analyze the projects," Watson said. "Then a decision is made in conjunction with the governor's office. It's our job to analyze projects by the economic benefit that they provide to the state."

Among McMahon's defenders is fellow Greenwich Republican Tom Foley, who lost to Malloy by 6,500 votes in the 2010 gubernatorial race and has already announced his plans to run again in 2014. A vocal critic of Malloy's administration who has started his own think tank, Foley disagreed that the WWE's application for economic incentives undermines McMahon's platform.

"I don't see anything wrong with her company applying for credits and incentives," Foley said. "You'd be foolish not to. But that doesn't mean it's good policy."